U.S. Trade Representative (USTR) Robert Lighthizer said Wednesday he has served Canadian Trade Minister Mary Ng with written notice that the U.S. is “exercising its rights to enforce” the CUSMA free trade pact, and is seeking consultations on the matter.

At issue, he said, is Canada’s allocation of dairy tariff-rate quotas (TRQs) — the amounts below which U.S. dairy products may enter the Canadian market at a lower rate of duty.

“By setting aside and reserving a percentage of each dairy TRQ exclusively for processors, Canada has undermined the ability of American dairy farmers and producers to utilize the agreed-upon TRQs and sell a wide range of dairy products to Canadian consumers,” Lighthizer’s office said in a release.

“Canada’s measures violate its commitments and harm U.S. dairy farmers and producers,” he said in the same release. “We are disappointed that Canada’s policies have made this first-ever enforcement action under (CUSMA) necessary to ensure compliance with the agreement.”

If the U.S. and Canada can’t resolve the stated concerns through consultations, the USTR’s office said it may request that a CUSMA dispute settlement panel be set up to examine the matter.

CUSMA grants Canada the right to maintain 14 TRQs on dairy products such as milk, cream, ice cream, skim milk powder, cheeses, condensed milk, yogurt and buttermilk, among others, the USTR said.

However, the USTR said, in notices to importers published in June and October, Canada sets aside and reserves a percentage of all its TRQs for processors. For 10 of the 14 TRQs, “an additional percentage is reserved for so-called ‘further processors.'” Also, on 13 of the TRQs, 10-15 per cent is “additionally reserved for distributors.”

Thus, the USTR said, “for all of Canada’s dairy TRQs, 100 per cent of the TRQ has been allocated among processors, ‘further processors,’ and distributors.”

Those allocations limit U.S. producers’ and exporters’ access to in-quota quantities negotiated under CUSMA, and also “introduce a new or additional condition, limit, or eligibility requirement on the utilization of a TRQ,” contrary to CUSMA provisions, the USTR alleges.

CUSMA entered into force on July 1 this year after the three member nations signed the pact in late 2018. It replaced the 1994 North American Free Trade Agreement (NAFTA) — a deal U.S. President Donald Trump, before he took office in 2016, pledged to renegotiate.

The new pact, Canada’s government said at the time, is meant to “preserve key elements of the long-lasting trading relationship and incorporate new and updated provisions that seek to address 21st-century trade issues.”

“The TRQ allocations by the federal government are consistent with the terms of the agreement,” Dairy Farmers of Canada CEO Jacques Lefebvre said via email Wednesday afternoon.

“Anyone who reads the text of CUSMA would see this, but the outgoing administration may feel that, by taking this approach, it will endear itself with family-owned dairy farms in the U.S.,” he added.

“Like all aspects of the Canada-U.S. trade relationship, Canada takes its obligations very seriously,” a spokesperson for Ng’s office said separately via email Wednesday.

“Canada’s administration of its dairy TRQs is in full compliance with its commitments under the new NAFTA.” — Glacier FarmMedia Network

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In a statement, Lighthizer said both Mexico and Canada had taken measures necessary to comply with their commitments under the U.S.-Mexico-Canada Agreement (CUSMA), which replaces the 26-year-old North American Free Trade Agreement (NAFTA).

Some industries, including automakers, had been arguing for a delayed implementation because of the difficulties they are facing from the coronavirus pandemic.

Mexico had asked the U.S. and Canada for a longer transition period for the auto industry to certify that it was meeting new, more stringent North American content rules.

Lighthizer said his office would work to ensure a smooth implementation of the new trade rules.

“The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America,” Lighthizer said in a statement, calling CUSMA’s entry into force “a landmark achievement in that effort.”

The accord includes tougher rules on labour and automotive content but leaves US$1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged. U.S. President Donald Trump had been a critic of NAFTA.

— Reporting for Reuters by Andrea Shalal and David Lawder.

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Trump, on trial in the U.S. Senate on charges of abusing power and obstructing Congress, welcomed Republican senators at the South Lawn event by name. Other guests included lawmakers from around the country, workers, farmers and CEOs, and officials from Mexico and Canada, the White House said.

The Canada-U.S.-Mexico Agreement (CUSMA) will replace the 26-year-old North American Free Trade Agreement, including tougher rules on labour and automotive content but leaving US$1.2 trillion in annual U.S.-Mexico-Canada trade flows largely unchanged.

“Today, we are finally ending the NAFTA nightmare and signing into law the brand-new U.S.-Mexico-Canada Agreement,” Trump told the crowd. Flanked by a group of U.S. workers wearing hard hats, Trump said the agreement would bolster U.S. economic growth, benefiting farmers, workers and manufacturers.

He said his concerns about NAFTA triggered outsourcing had triggered his run for the presidency in 2016.

A wide array of business groups welcomed the agreement, which also won a rare endorsement of the AFL-CIO union federation. Mexico has already approved the deal, but it must still be ratified by Canada’s Parliament before it can take effect.

The influential United Autoworkers said the new deal would not restore hundreds of thousands of U.S. manufacturing jobs lost to Mexico after NAFTA, and vowed to be aggressive in pushing for enforcement of the trade agreement’s provisions.

Democratic presidential candidate Bernie Sanders, a Vermont senator who voted against the pact earlier this month, said the NAFTA replacement deal would not stop the offshoring of U.S. jobs and amounted to “a giveaway to the fossil fuel industry.” He said he would immediately renegotiate the pact if elected.

Canadian Prime Minister Justin Trudeau, speaking in Ottawa, said his minority government would continue to answer questions posed by various industries and other groups.

“We have questions and we have a process for ratification. I just look forward to getting, getting through it responsibly and rapidly because it’s so important for Canadians,” he said.

No Democrats

Excluded from the event were House of Representatives Speaker Nancy Pelosi, House ways and means committee chairman Richard Neal and other Democrats who negotiated with the Trump administration for months to expand the pact’s labour, environmental and enforcement provisions and pave the way for its approval by the Democratic-controlled House.

Trump did not mention the work done by Pelosi or other Democrats on the trade pact, but U.S. Trade Representative Robert Lighthizer, in his remarks at the ceremony, acknowledged the role that House leaders played in getting the deal done.

Partisan tensions were running high as U.S. senators started to pose questions in Trump’s impeachment trial, ahead of a key vote later this week on whether to allow the calling of witnesses such as former national security adviser John Bolton.

The White House on Wednesday objected to the publication of a book written by Bolton that depicts Trump as playing a central role in a pressure campaign on Ukraine to launch investigations of Democrats, including former Vice-President Joe Biden, a top contender for the Democratic nomination to face Trump in this year’s election.

Pelosi told reporters that Democrats had ensured “vast improvements” to CUSMA before it was approved, despite their absence from Trump’s White House event, adding, “I hope he understands what he’s signing today.”

Neal told reporters some Republican senators thought the deal was “too Democratic.” He said the final accord won stronger protections for workers, better enforcement of environmental provisions and steps to prevent higher drug prices.

Representative Rosa DeLauro told reporters in a separate teleconference that Democrats would remain vigilant on oversight of the improved trade deal and would fight for even better climate protections in future trade deals.

The U.S. Senate this month overwhelmingly approved legislation to implement CUSMA, sending the measure to Trump for signing into law.

‘Long-term predictability’

U.S. lawmakers said it was unclear when the accord would take effect, since Canada’s main opposition Conservative Party had expressed concerns about aspects of the deal and there was no exact timeline for ratification there.

Even after Canada ratifies the accord, implementation could take several more months since the three countries must show they are meeting their obligations before the clock starts ticking on an effective date.

Export-minded Canadian farm groups were among those calling this week for the deal’s quick passage through Canada’s House of Commons and Senate.

“After three years of uncertainty, it’s time to restore long-term predictability to North American supply chains,” the Canadian Agri-Food Trade Alliance said Wednesday in a joint statement with other Canadian business organizations.

“The success of Canadian agriculture is not a partisan issue,” Grain Growers of Canada chair Jeff Nielsen, an Alberta grain grower, said Monday in a separate release. “We urge all parties to work together to see the legislation through.”

— Reporting for Reuters by Andrea Shalal and Jeff Mason; additional reporting by Susan Heavey, David Shepardson and Alexandra Alper in Washington and David Ljunggren in Ottawa. Includes files from Glacier FarmMedia Network staff.

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As part of the agreement, Beijing committed to buy an additional $32 billion in U.S. agricultural products over two years, or roughly $16 billion a year more than the 2017 baseline of $24 billion, U.S. Trade Representative Robert Lighthizer said (all figures US$). He said Beijing would aim for another $5 billion in farm purchases each year on top of that.

Lighthizer said broad targets for Chinese purchases would be released publicly. There would also be specific targets for purchases of specific products, but those would not be made public to avoid distorting markets.

U.S. corn and wheat futures followed soybeans higher in response to the news.

Chicago Board of Trade January soybean futures settled up 9-1/4 cents at $9.07-1/2 per bushel, after reaching $9.17, the contract’s highest since Nov. 19. CBOT March corn ended up 3-1/4 cents at $3.81 a bushel, and March wheat rose 2-1/4 cents to close at $5.32-1/2 a bushel.

Front-month soybeans had been trading above $10 a bushel in June 2018, before the start of the trade war. With U.S. farmers sitting on a huge soy surplus following several bumper harvests, prices tumbled as China, which used to buy 60 per cent of the U.S. soy crop, turned to South American supplies instead.

Soybean futures have since pared losses, supported by poor U.S. weather that limited the size of the 2019 crop.

Values firmed on Friday but gains were muted as traders sought more information about the trade pact.

“(D)emand is still the same today as it was yesterday. Some increase in demand is likely, but prices likely don’t sustain a rally without details to justify the move,” INTL FCStone chief commodities economist Arlan Suderman said in a client note.

The United States has been pushing for China to commit to buy $50 billion in agricultural products in 2020, after U.S. President Donald Trump said during an Oct. 11 news conference that the two countries had agreed to a “phase one” trade deal that included a “purchase of from $40 (billion) to $50 billion worth of agricultural products.”

China bought $24 billion in U.S. farm products in 2017, according to U.S. Department of Agriculture figures.

“Grain traders are pessimistic about what sort of agricultural purchases are actually possible,” said Joe Vaclavik, president of Standard Grain.

“The entire soybean crop is valued at $32 billion. So for them to hit $50 (billion) would be impossible, in my opinion, in a given year. Could they increase purchases and get back up to a pre-trade war type level? Sure, that is probably possible,” Vaclavik said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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The signing ceremony in Mexico City launched what may be the final approval effort for U.S. President Donald Trump’s three-year quest to revamp the 1994 North American Free Trade Agreement (NAFTA), a deal he has blamed for the loss of millions of U.S. manufacturing jobs.

The event at the National Palace was attended by Mexico President Andres Manuel Lopez Obrador, Canadian Deputy Prime Minister Chrystia Freeland, U.S. Trade Representative Robert Lighthizer and U.S. White House adviser Jared Kushner.

The result of a rare show of bipartisan and cross-border co-operation in the Trump era of global trade conflicts, the deal was inked the same day as he became the fourth U.S. president in history to face formal impeachment.

Lighthizer called it “a miracle” that actors from across the political spectrum had come together, calling it a testament to the benefits of the deal. Lopez Obrador credited Trump for working with him, while Freeland celebrated a win for multilateralism.

“We have accomplished this together at a moment when, around the world, it is increasingly difficult to get trade deals done,” she said.

The U.S.-Mexico-Canada Agreement (CUSMA) was signed more than a year ago to replace NAFTA, but Democrats controlling the U.S. House of Representatives insisted on major changes to labour and environmental enforcement before bringing it to a vote.

Delays, led primarily by Democrats and U.S. organized labour, at times threatened to scuttle the deal, creating investment uncertainty in all three countries and worrying U.S. farmers already suffering tariffs stemming from Trump’s trade war with China.

Intense negotiations over the past week among Democrats, the Trump administration and Mexico produced more stringent rules on labour rights aimed at reducing Mexico’s low-wage advantage, including verification of labour compliance at the factory level by independent labour experts.

“It is infinitely better than what was initially proposed by the administration,” House Speaker Nancy Pelosi told a news conference, adding that CUSMA was now ready for a House vote.

Some Mexican business groups fear that Lopez Obrador and his chief negotiator, Deputy Foreign Minister Jesus Seade, have ceded too much, and call the labour verification a violation of Mexican sovereignty.

Seade himself, who signed the deal on Tuesday, said some of the changes were reasonable but not necessarily “good for Mexico.”

Next “they’ll cede the Isthmus of Tehuantepec,” said Gustavo Hoyos, president of employers federation Coparmex and a vocal Lopez Obrador critic, referring to a strategic region of Mexico. He called the government “a bad negotiator.”

Republican and Democratic U.S. lawmakers say there is broad support for revising the trade pact, which encompasses US$1.2 trillion in annual trade across the continent and supports 12 million U.S. jobs and a third of American agricultural exports, backers say.

U.S. House ways and means committee chairman Richard Neal, a Democrat, said sections of the text would be reviewed by lawmakers, but he saw no reason for “unnecessary delays” in bringing the trade pact to a vote on the House floor.

However, in a new wrinkle to swift ratification in the United States, U.S. Senate Majority Leader Mitch McConnell said the Republican-controlled Senate would not take up the deal before congressional recess, potentially pushing the vote into next year.

That seemed to put him at odds with Trump spokeswoman Stephanie Grisham, who said the White House would “push hard” to get the implementing bill passed before year-end.

Trump launched a renegotiation of NAFTA in his first year in office, intent on delivering on his 2016 campaign promise to replace what he has derided as the “worst deal ever.” Canadian and Mexican leaders reluctantly agreed to join the negotiations with their largest trading partner.

“America’s great USMCA Trade Bill is looking good. It will be the best and most important trade deal ever made by the USA. Good for everybody,” Trump tweeted on Tuesday. “Importantly, we will finally end our Country’s worst Trade Deal, NAFTA!”

For Democrats, the deal serves as a retort to Trump’s and Republicans’ assertions that their only agenda was pursuing his impeachment.

In addition to the labour provisions, Democrats said they won elimination of a 10-year data exclusivity period for biologic drugs from the agreement, which they feared would lead to higher U.S. drug prices.

But Pelosi said she lost her bid to remove liability protections for internet service providers, a provision she had called a “giveaway” to big tech companies.

U.S. Trade Representative Lighthizer included a last-minute demand of Mexico for a tighter definition of steel and aluminum in CUSMA’s automotive rules of origin to be “melted and poured” in North America. While CUSMA originally required 70 per cent of the metals used in North American vehicle production come from the region, it did not specify production methods, opening the door to the use of semi-finished metals from China and elsewhere.

Mexico and Canada agreed to a seven-year phase-in of the new standard for steel, industry sources familiar with the deal said. The aluminum demand was dropped, but with the caveat that it would be reconsidered in 10 years.

— Reporting for Reuters by Andrea Shalal and Sharay Angulo; additional reporting by David Lawder in Washington and Abraham Gonzalez and Daina Beth Solomon in Mexico City; writing by Dan Burns.

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U.S. Trade Representative Robert Lighthizer and White House senior adviser Jared Kushner are due to fly to Mexico City on Tuesday to try to pin down final details of the agreement, an administration official told Reuters late Monday afternoon.

Congressional aides and industry sources said that a proposed deal has been sent to U.S. House of Representatives Speaker Nancy Pelosi, who will make the final decision on whether and when to bring the U.S.-Mexico-Canada Agreement (CUSMA) to a vote.

“We’re studying the proposal,” a senior Democratic aide told Reuters, adding that there was not yet an agreement to announce.

The Mexican government has also invited Canada’s deputy prime minister, Chrystia Freeland, to Mexico City, a Mexican official said.

Canadian Prime Minister Justin Trudeau’s office on Monday said Freeland would also be in Mexico City on Tuesday to “participate in meetings with the United States and Mexico on NAFTA.”

CUSMA, which would replace the 26-year-old North American Free Trade Agreement (NAFTA), encompasses US$1.2 trillion in annual trade across the continent. Its backers say it is responsible for 12 million U.S. jobs and a third of all U.S. agricultural exports.

It needs to be approved by lawmakers in all three countries. In the United States, Democrats have so far been reluctant to stage a vote that would give a political victory to Republican President Donald Trump.

And time is running out for a vote before year end. Lawmakers from both parties said that waiting until next year could make it more difficult to ratify, because the presidential election campaign — and perhaps impeachment proceedings against Trump — will be in full swing.

Many on Capitol Hill were reluctant to declare that a deal had been struck. Since negotiations to replace NAFTA first started in August 2017, deals have been imminent numerous times, only to be delayed by last-minute hitches.

Leaders of the U.S., Canada, and Mexico signed the initial CUSMA agreement more than a year ago, but since then, Democrats controlling the House have pressed for changes to strengthen the enforcement of new labour standards and relax data protections for biologic drugs that they fear will mean higher drug prices.

Pelosi is scheduled to meet on Monday evening with senior House Democrats who have been working on changes to the pact, a Democratic House aide said.

Lighthizer last week also added a new demand — that the trade deal strengthen the automotive rules origin to include steel and aluminum that is “melted and poured” in North America.

The prior requirement that 70 per cent of the steel and aluminum in North American cars come from the region did not specify a production method, opening the door to the used of semi-finished metals from China and elsewhere.

Trump, who blamed NAFTA for the loss of millions of U.S. factory jobs during his 2016 re-election campaign and vowed to quit or renegotiate it, said Monday that “a lot of strides have been made over the last 24 hours” on CUSMA.

“I’m hearing very good things. I’m hearing from unions and others that it’s looking good,” Trump told reporters at the White House.

Trump spoke earlier with AFL-CIO president Richard Trumka about the CUSMA negotiations, a person familiar with the call said.

Trumka, one of the most powerful U.S. labour leaders, has been a major party to the negotiations, pushing for stronger labour enforcement provisions that ensure Mexican workers are allowed to unionize.

Trumka earlier told the Washington Post that there was a deal on CUSMA that he was reviewing with his executive committee.

“We have pushed them hard and have done quite well,” Trumka was cited as saying by the Post.

Neither Trumka nor an AFL-CIO spokeswoman responded to queries about the pact or the phone call with Trump.

Mexican senators endorse changes

Details of the proposed changes have not been disclosed. Mexican officials rejected U.S. demands to allow U.S. factory inspectors to supervise labour enforcement, but have said that Mexico would allow panels of experts and a third party to review labour standards.

Mexican President Andres Manuel Lopez Obrador on Monday said that Mexican senators had endorsed changes to CUSMA that had been accepted by Mexico. He urged Pelosi to move forward with a vote on the trade deal.

U.S. Senate finance committee chairman Charles Grassley spoke with USTR’s Lighthizer about the pact on Monday and is hoping for a deal announcement soon, said Grassley’s spokesman, Michael Zona.

Congress had been scheduled to leave Washington by the end of this week, but consideration of spending and defense bills is likely to keep lawmakers working for a few more days beyond that.

“We have to bring this to an end,” Johns Hopkins University professor Jonathan Sands, who directs the university’s Center for Canadian Studies, said of CUSMA approval. “Every part of the trade debate is up in the air right now, with the trade war on China and trade tensions with Europe ramping up.”

U.S.-China trade talks are set to come to a head this week. New U.S. tariffs on some US$156 billion worth of Chinese consumer goods are due to take effect on Sunday unless an interim deal is reached before then.

— Reporting for Reuters by David Lawder and Sharay Angulo; additional reporting by Richard Cowan, David Shepardson, Steve Holland, Jeff Mason and Andrea Shalal; writing by David Lawder. Includes files from Glacier FarmMedia Network staff.

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Trump said the deal would open up Japanese markets to some $7 billion worth of American products annually, cutting Japanese tariffs on U.S. beef, pork wheat and cheese (all figures US$).

U.S. Trade Representative Robert Lighthizer said after a signing ceremony between the two leaders on the sidelines of the United Nations General Assembly that cars — the biggest source of the $67 billion U.S. trade deficit with Japan — were not covered in the announcement.

Japan wanted further discussions on this issue, Lighthizer said.

It was not the U.S. intention to impose so-called Section 232 national security tariffs on Japanese autos and auto parts and the two sides would work together in good faith, aiming to start talks on phase two of an agreement next April, he said.

Japanese Foreign Minister Toshimitsu Motegi, who had negotiated the pact with Lighthizer, was more direct in saying that Japan received assurances that car tariffs would not be implemented.

“As long as the agreement is implemented faithfully, Section 232 will not be applied. This is what Prime Minister Abe confirmed with President Trump at the summit meeting,” Motegi told reporters.

A Japanese government statement also said further talks would seek to eliminate the existing 2.5 per cent U.S. tariff on Japanese cars and would not result in the imposition of U.S. import quotas on Japanese autos.

Lighthizer, during a previous stint at USTR in the 1980s, helped negotiate voluntary export restraints on Japanese autos, which led to increased U.S. production by Japanese automakers. But Japan still exports about 1.7 million cars a year to the United States, making up about 10 per cent of U.S. vehicle sales.

Wednesday’s deal was met with cautious praise from farm groups and lawmakers, who said they looked forward to a more complete deal.

Representative Jackie Walorski, an Indiana Republican, said she was “encouraged the deal will mean fewer barriers to digital trade and more certainty that costly auto tariffs will not threaten American jobs or raise prices for consumers.”

The U.S.-Japan talks, launched a year ago, hit a snag earlier this week as Japan had sought last-minute assurances that Trump would not impose the Section 232 tariffs.

The U.S. Trade Representative’s office characterized the agreement signed by Trump and Abe as “early achievements” from their negotiations on market access for agriculture, industrial goods and digital trade.

The deal could provide some limited relief for U.S. farmers, who have been battered by China’s retaliatory tariffs against U.S. soybeans, pork and other products in the 15-month-long trade war between Washington and Beijing.

Under the agreement, Japan would open new markets to about $7 billion in American agricultural products, Trump said. “Japanese tariffs will now be significantly lower or eliminated entirely for U.S. beef, pork, wheat, cheese, corn, wine and so much more.”

Trump later praised China’s recent agricultural purchases as “goodwill” measures and said a deal with Beijing could come sooner than people think.

Trump also said signing ceremony with Abe that the deal’s first phase would cover $40 billion worth of digital trade between the world’s largest and third-largest economies.

The USTR said about 90 per cent of U.S. food and agricultural products will receive duty-free or reduced-tariff access to Japan, but wheat will still be subject to a quota limiting the volume of U.S. imports.

However, many of the products gaining new access will still face tariffs that phase out over several years, including wine, ethanol, cheeses, processed pork, poultry, frozen potatoes, oranges, cherries and egg products.

Motegi told reporters that the tariff cuts on U.S. farm products are “within the range” of tariff cuts granted to countries in the Trans-Pacific Partnership trade deal, which Trump quit in 2017.

Japan will see reduced or eliminated tariffs on a small amount of agricultural goods, including cut flowers and soy sauce, and a wide range of industrial goods, including steam power turbines, machine tools, bicycles and musical instruments.

The digital trade agreement largely follows the U.S. model of internet development, prohibiting taxes on cross-border digital downloads and rules requiring so-called data localization — the storing of data on devices physically present within a country’s borders, the USTR said.

— Reporting for Reuters by Jeff Mason, David Lawder and David Brunnstrom.

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While U.S. Trade Representative Robert Lighthizer said he was confident the U.S-Mexico-Canada trade agreement would come up for a vote and pass, Trump told him in front of reporters that he knows “these people” better, referring to Democrats.

“I don’t think Nancy Pelosi will have time,” said Trump. “She’s wasting her time on a, you know let’s use a word that they used to use a lot: a ‘manufactured crisis.'”

Pelosi announced on Tuesday that Democrats in the House of Representatives had launched a formal impeachment inquiry into Trump, accusing him of seeking foreign help to smear Democratic rival Joe Biden ahead of next year’s election.

“I don’t know whether or not they’re going to have time to do any deals,” Trump said. “I don’t think they can do any deals. You know, we were working on guns, gun safety.”

Canada, the U.S. and Mexico signed the agreement last year to replace the trillion-dollar North American Free Trade Agreement (NAFTA), and it must now be ratified.

Lighthizer later said was confident the trade pact would come up for a vote because it is an extremely good agreement and “if it did not pass it would be a catastrophe for our economy.”

He said the legislation should be modified to address Democrats’ concerns, including reservations about the enforceability of the labor and environment provisions.

Mexico, Canada urge ratification

Mexican President Andres Manuel Lopez Obrador said the deal should be passed by the U.S. Congress quickly, not left until closer to the November 2020 U.S. presidential election.

“It’s better if this gets resolved soon. It’s in the interest of all three nations,” Lopez Obrador told journalists at a daily media briefing.

Canadian Prime Minister Justin Trudeau said, “We’ve always been focused on the ratification of the USMCA in a way that tries to go beyond the partisan differences in the United States.”

“Our focus remains on ensuring that this deal… goes forward and that’s what we are going to remain focused on,” said Trudeau.

Mexico’s peso slipped as much as 0.9 per cent versus the dollar to an almost three-week low, and the benchmark Mexican stock index fell as much 1.24 per cent, with banks citing the impeachment inquiry as sapping investor appetite for risk. Both the peso and stock index recovered slightly in later trading.

The Canadian dollar has been little changed at about 1.326 to the U.S. dollar, or 75.41 U.S. cents since the launch of a formal impeachment inquiry. The Toronto stock market has fallen about 0.7 per cent since Monday as lower oil prices weighed on energy stocks.

Capital Alpha Partners said it lowered its estimated likelihood of passage for USMCA to 30 per cent. “USMCA is on life support,” said James Lucier, analyst for the firm.

— Reporting for Reuters by Jeff Mason; writing by Mary Milliken and Anthony Espisito; additional reporting by Andrea Shalal in Washington, David Ljunggren in Delta, B.C., Fergal Smith in Toronto and Miguel Angel Lopez in Mexico City.

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U.S. Treasury Secretary Steven Mnuchin told reporters at the United Nations General Assembly that the trade talks would resume next week with Chinese Vice Premier Liu He returning to Washington to meet with him and U.S. Trade Representative Robert Lighthizer.

Trump, speaking alongside Mnuchin, questioned his Treasury chief about the request that the Chinese delay a trip to meet with U.S. farmers in Montana and Nebraska. Mnuchin had said the trip was delayed at the administration’s request to avoid confusion over the talks.

“Why was that our request, just out of curiosity?” Trump asked.

Mnuchin explained again that the U.S. side “didn’t want confusion around the trade issues.”

Trump then interjected: “Yeah, but I want them to buy farm products.”

“There was no confusion,” Mnuchin replied. “We want them to buy agriculture. They have committed to buy agriculture. And they’re doing that.”

Trump added that China had “committed to buy a lot of agriculture” and the United States should ship the products as fast as possible.

The exchange came after Chicago grain traders said Chinese importers on Monday had bought about 10 boatloads of U.S. soybeans — around 600,000 tonnes — to be shipped from Pacific Northwest ports from October through December. News of the deals sent soybean futures prices higher.

Cancellation of the planned trip cast a pall over conclusion of two days of U.S.-China trade talks last week, sending U.S. stocks lower. People familiar with the talks said that there were no new substantive offers made, but both the U.S. and Chinese sides said the talks were productive, and that minister-level talks would take place in early October.

— Reporting for Reuters by Steve Holland; additional reporting by Jeff Mason, David Lawder and Karl Plume; writing by David Lawder.

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U.S. Trade Representative Robert Lighthizer and Economy Minister Toshimitsu Motegi reached the deal in Washington on Friday, with Tokyo cutting tariffs on U.S. beef but Washington maintaining tariffs on Japanese autos, Nikkei said.

The newspaper did not cite any sources for its information.

The results of the Lighthizer-Motegi talks will be announced at a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe expected on Sunday on the sidelines of the Group of Seven summit in Biarritz, France, the Nikkei said.

The report came shortly after Motegi told reporters in Washington that he and Lighthizer had made “big progress.”

Motegi said the three-day talks that ended on Friday would probably be the last ministerial-level discussions and working-level officials would continue to hammer out on details.

Japan will cut its tariffs on U.S. beef and pork to the levels applied to members of the Trans-Pacific Partnership (TPP) agreement, the Nikkei said. Trump pulled America out of the TPP, which had been championed by his predecessor, Barack Obama.

The United States will not cut the 2.5 per cent tariff it applies on Japanese autos for now but separate talks on those would continue, the Nikkei reported. It said Washington was “moving in the direction” of scrapping tariffs on some of the 400 types of Japanese car parts that Tokyo is seeking.

Trump and Abe may sign the pact in late September if they can reach a final deal, the Nikkei said. They were expected to meet then on the sidelines of the United Nations General Assembly.

“I think how we proceed the talks from now on, and the time schedule, will be announced at the summit meeting scheduled in Biarritz,” Motegi said.

He said Abe and Trump would confirm the progress that was made at the ministerial meetings and decide how to proceed.

“We have been making efforts to narrow gaps,” Motegi said.

“We negotiated to protect Japan’s position, our position on agriculture,” he said.

Japanese officials had previously said Tokyo could cut tariffs to TPP levels but no further.

Motegi and Lighthizer initially planned two days of talks but negotiations extended to a third day on Friday in an effort to narrow differences on areas such as agriculture and automobiles.

Trump is unhappy with Tokyo’s large trade surplus and he could pile pressure on Japan to curb its auto exports to the United States and open its highly protected agriculture market to fix what he calls unfair trade imbalances.

Motegi declined to comment on details but said the negotiations were based on the two nations’ joint statement in September.

Trump will talk to his counterparts during his visit to France about how to open up their markets to ensure U.S. businesses have avenues to sell goods and services.

The United States and China are also engaged in an expensive trade dispute that has disrupted financial markets worldwide.

— Reporting for Reuters by Kaori Kaneko in Tokyo, David Lawder, Andrea Shalal and Jonas Ekblom in Washington and Chizu Nomiyama in New York.

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